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>> he never forgot, and he used to tell my brother and me how it felt watching this young man get loaded onto trip trains, knowing that many would never return home. after he died, many years later, i received an outpouring of letters and photographs from some of the men he had trained
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if it served and returned home, and built lives and families of their own. i just couldn't believe that that experience, being yelled at by my father, was so formative for them it and i was so glad to hear, frankly. i saw the same sense of dedication and duty when, as first lady and then as senator from new york, i visited with servicemembers and their families all over the world. then i was honored to serve on the armed services committee and to work closely with men and women throughout this building, and in particular with secretary mchugh who would become a great partner with me on the half of our military bases and personnel in new york. and what we did to try to keep moving forward in improving readiness and modernizing capability, i was so impressed
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by the quadrennial defense review that i did launch a similar effort at state called the qddr or the quadrennial diplomacy and development review. and now for years as secretary of state has ended, but my appreciation for everything you do is deeper than ever. i've had the chance to visit with many of our forces overseas, sometimes in the company of some of you in the audience today, especially of course in afghanistan, but also here at home from hawaii the norfolk to annapolis. this past may i had the chance to go down to tampa and speak to a special operations conference sponsored by admiral mcraven. and i had the chance then, too, to thank them for their remarkable service, and talk about the complex and crosscutting threats that we faced. so we do have to keep innovating and integrating.
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we have to get our house here at home in order. we have to avoid devastating self-inflicted wounds. we have to remain committed to upholding america's global leadership, and our core values of freedom and opportunity. now, leon and i have both seen us as we have traveled the world. american leadership remains respected and required. there is no real precedent in history for the role we play, or the responsibility we have shouldered. there is also no alternative. but i often remind myself that our global leadership is not our birthright. it has to be earned by each successive generation. staying true to our values and living up to the best tradition of our nation. secretaries and presidents come
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and go, but this responsibility remains constant. it truly must be our north star. so in the years ahead, we will be looking to all of you and to your successors to carry this mission of american leadership forward, to keep our nation strong, free, and exceptional. so thank you for this tremendous honor that has been bestowed upon me by the chairman, and also the honor by the secretary. i thank you all for your service, and i thank both of you, and others of you here today, for your friendship. let's wish our country, godspeed, and please extend to all with whom you serve my deepest gratitude, not as a retired public official, but as an american citizen. thank you all. [applause]
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>> ladies and gentlemen, please remain standing for the departure of the official party. please remain in place until your row is invited to depart. >> on c-span2, a hearing on a government report on federal programs vulnerable to waste, fraud, and abuse and mismanagement. then at 9 a.m., the homeland security department in light of the gao report. >> domestic drone use is the focus of the house science space and technology subcommittee hearing friday morning. members will examine the challenges facing operations in u.s. airspace. officials from the faa and nasa are expected to testify. live coverage 10 a.m. eastern on our companion network c-span3.
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>> thursday at a senate banking hearing committee on dodd-frank financial regulations senator elizabeth warren of massachusetts, thomas curry, about prosecuting big banks when they break the law. here's a portion of the event. >> thank you very much, mr. chairman. thank you, ranking member. it's good to be here. thank you all for editing. i sat what he said. it's harder than look so i appreciate your being you. i want to ask a question about supervising banks when they break the law. including the mortgage foreclosure of others as well. we all understand why settlements are important, that trials are expensive and we can't dedicate huge resources to them. but we also understand that it's a party is unwilling to go to trial, either because it's too
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timid are because they lack resources, that the consequence is that a lot less leverage in all the settlements that occur. now, i know there's been some landmark settlements but we face a very special issues with big financial institutions. they can break the law and dragon billions in profits. and then turn around and settle, paying out of those profits. there isn't much incentive to follow the law. it's also the case, not a trial, it means we didn't have those days and days and days of testimony about what the financial institutions had been up to. so the question i really want to ask is about how tough you are, about how much leverage you really have in the settlements. and what i'd like to know is tell me a little bit about the last few times and you've taken the biggest financial institutions on wall street all
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the way to a trial. [applause] >> anybody? >> offer my perspective. thanks, supervisor. we primarily have viewed the tools that we have as mechanisms for correcting deficiencies. so in the primary motive for our action is identify the problem and then demand a solution to it on an ongoing basis. >> that's right. and you set a price for them. start to rub i want to move this along. to effect a similar. and am asking is when did you -- i know you have been there for ever someone asking about the others, a financial institution, a wall street bank to trial speak with the institutions i supervise national banks, we've had a fair number of consent orders. we do not have to bring people
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to a trial or -- >> i appreciate you say don't have to bring them to trial. my question is when did you bring them to trial? >> we have not had to do it as a practical matter to achieve our supervisory goal. >> walter? >> i thank you, senator. as you know, among our remedies, our penalties but the phillies we can get our limited and what i should have asked for additional authority. my predecessor did, to raise penalties. when we look at these issues and we truly believe that we have a very vigorous enforcement program, we look at the distinction between what we can get it to go to trial and what we could get if we don't. >> i appreciate that. that's one reason. the question i'm asking is can you identify when you last took a wall street bank to trial? >> i will have to get back to you with the specific information, but we do litigate
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and we do have settlements that are either rejected by the commission or not put forward. >> we've got multiple people here. anyone else want to tell me about the last time you took the wall street banks to trial? i just want to note on this, there are district attorneys and u.s. attorneys who are out there everyday squeezing ordinary citizens on sometimes very thin grounds, and taking them to trial in order to make an example, as they put it. i'm really concerned of too big to fail has become too big for trial. that just seems wrong to me. [applause] >> you're watching c-span2 with politics and public affairs. weekdays feature live coverage of the u.s. senate. on weeknights watch key public policy defense, and every week in the latest nonfiction authors and books on booktv. you can see past programs and their schedules at our website,
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and you can join in the conversation on social media sites. >> thursday, the government accountability office released its 2013 report of federal programs and operations identified as high risk for waste, fraud, and abuse, or mismanagement. gao comptroller general dodaro discuss the details of this review during the house oversight and government reform committee hearing. it's an hour and 45 minutes. >> the hearing will come to order on gao's high risk list and opportunities for reform. we on the oversight government reform committee exist to secure to fundamental principles. first, americans have a right to know that the money washington takes from them is well spent. and second, americans deserve an
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efficient, effective government that works for them to our duty on the government oversight and reform committee is to protect these rights to our solemn responsibility is to hold government accountable to taxpayers. because taxpayers have a right to know what they get from their government. our obligation is to work tirelessly in partnership with citizen watchdogs and the gao to deliver the facts to the american people and bring genuine reforms to the federal bureaucracy. today, we are having our broadest oversight hearing that we have been anyone congress. that's because the gao's report is, in fact, on all spending of government and all risks to government. and, in fact, is the most important report published. each two years, general dodaro and his staff access all the risks to the government. in the size of the risk him in
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dollars, but also in the likelihood of success or failure. this risk reduces the top, if you will, highest threat. had also recognizes that success that sometimes occurs because of both gao and this committee's efforts to work with the government, to reduce waste and risk to government. this year by one account we lost $261 billion, or 7%, of our total spending in fraud and waste. i might note that when you analyze that, or if you will, decade i said, that represents $2.6 trillion, about twice what we're looking at in sequestration. 30 areas that this year are on the high risk list represent tremendous opportunities to save
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those billions of dollars. and i might repeat, if we're able to save just half of what we waste, we would need no sequestration at all. as we're going to hear today, those areas extend from the department of defense to our weather system, from elements related to great storms such as superstorm sandy, two in fact a simple mundane medicaid medicare program that everyday touch our lives in important ways. the truth is identify high-risk areas isn't enough anymore. it's clear that many of the areas on high-risk our perennial high risk. 17 areas on this year's high risk list have been on that list for more than a decade. six have been on that list since
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inception. i don't expect overnight to fix dod procurement. i don't expect overnight to take medicare, now become our largest total expense and eclipsing, if you include the dual eligible medicaid medicare recipients, eclipsing both social security and our department of defense individual spending, i don't expect to fix it overnight. but with the help of the gao on a nonpartisan basis, our committee and of the committees of congress have an opportunity to attack each of these areas and make real improvements. our commitment is to make those real improvements. i'm pleased, excuse me, i'm pleased to see a particular emphasis on the program, medicare and medicaid which are permanent fixtures that, in fact, this is an area of particular opportunity for production in waste and
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consistent with the affordable health care act, an area of growth in number of recipients. the committee has just voted on a bipartisan basis, on a report related specifically to new york state during the dialogue we mentioned an equally outlandish problem that existed in the state of texas. these billions of dollars can no longer be tolerant. we must find them not after decades of waste and abuse, but, in fact, in real-time. this committee will have before it today, will have before and during this congress an updated version of the bipartisan data act. it will have an updated version, or a version of our iq reform on a bipartisan basis. these and other systems that this committee is responsible for changes will create the opportunity to save money in i.t. procurement and deliver better information to
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decision-makers. it also will create greater transparency for the gao and their work, for congress in its work, and for all the watchdogs of waste and abuse. so as we begin this hearing today with our esteemed comptroller general, we also realize there is legislative work for us to do if this list is to be successfully attacked and reduced. i look forward to working on both a legislative issues and the oversight issues with my partner, the ranking member, mr. cummings, who i now recognize now for his opening statement. >> i want to thank you, thank you for holding the string. i think this'll be one of the most important hearings this committee will hold as congress. mr. dodaro, i also thank you for testifying before us today and i thank you for the work gao put in to work for creating this report. i also ask that you extend the gratitude of this entire committee for the hard work of
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the folks at gao. as i said earlier at a press conference, they have earned the reputation for outstanding and accurate work, work that helps our government function better. and so we publicly say thank you to them. everyone at gao's high risk report has been importance. however, this year's report is especially significant because the comptroller general and the nonpartisan experts at gao have made a landmark decision to add the issue of climate change to their biannual high-risk report, which details the most pressing challenges facing our nation and the federal government. in its report, gao identifies a serious risk facing our nation, one that we cannot continue to ignore. gao finds that climate change poses particularly significant
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financial risk to our nations economy, including agriculture, infrastructure, ecosystems, and human health. gao warns that our government is not well-positioned to address this fiscal exposure, and gao recommends a governmentwide strategic approach with strong leadership and the authority to manage climate change risks. gao finds that the government has already spent tens of billions of dollars on damage from severe weather events related to climate change. according to the national oceanic and atmospheric administration, over the past two years, the united states experienced 25 weather disasters that caused over a billion dollars each. gao's historic decision to add climate change to the list of high-risk challenges facing our nation is a wakeup call for congress to finally start addressing this very, very critical issue.
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unfortunately, in the last congress, the house republicans voted 37 times to block action to address the threat of climate change. for example, they slash a climate change research funding by more than $100 million. they voted to prevent the state department from using funds to send a special envoy for climate change the international climate negotiations. they voted to zero out the united states contribution to the intergovernmental panel on climate change, the world's leading authority on climate change science. they voted to prohibit the department of homeland security from using any funds to participate in the interagency climate change at that patient task force. and they voted to produce the department of agriculture from using any funds to implement its climate change adaptation program. what gao is telling us today is that congress simply cannot afford to block or delay action
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any longer. we must act now to implement gao's recommendations and mitigate the risks from climate change. for these reasons, i sent a letter to chairman issa today requesting that our committee hold a series of hearings to address each of the four specific areas that gao highlights in its report relating to climate change. and in an earlier press conference, chairman issa i've made a very good point, and that is, perhaps we should look at what responsibilities face states are playing with regard to climate change and what responsibilities they should have. and i'm hoping that we, as i said to him earlier, maybe we'll have some governors to come in and talk about their responsibility and things that they are doing to prepare for whether type of problems that might affect their states. mr. chairman, when we were here two years ago considering gao's
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last high-risk report in 2011, you said it was our committee's obligation to conduct a vigorous oversight over the issues raised by gao and to assist on plans for change by each of the agencies listed here today. i agree did then, and i agree now. with our committee section of my jurisdiction across multiple federal agencies and departments, we have a very unique opportunity to conduct hearings that will lead to vigorous oversight, responsible funding decisions, and legislation to address the growing threats to public health and our economy. as the president noted the other night in a state of the union, we have seen in the last 10 or 15 years just an onslaught of weather related problems. and i'm hoping that we all work together closely to prepare for the fiscal impact of those
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problems it and with that, i stand ready, willing and able to work with the chairman. and with that, i still backs. i thank the gentleman. and as we did discuss, i believe we need to kick off the first hearing related to the risk. and i look forward to scheduled the hearing, and also suggesting that other committees of jurisdiction to their oversight related specifically to those areas. and with that we now recognize our first witness, and the panel behind him. i'm pleased to welcome the honorable gene dodaro who is the comptroller general of the united states. he also comes with a small sampling of his team of experts from the united states government accountability office that is here today. and i'll try not to mess up your names but if you would rise just about the audience can know that you came -- he came with a tremendous amount of expertise. chris nim is managing director of strategic issues at gao.
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mark gaffigan is managing director of the natural resources and environment at the gao. cathleen berrick is managing director of homeland security and justice issues at the gao. phillip herr is managing director of physical infrastructure issues at gao. orice williams brown is managing director of financial markets, and every of particular concern, and community investment at the gao. and mr. david powner is director of information technology management systems at the gao. and i'm not going to ask you all to stand, because if you're going to help the general, you may very well be a witness. please raise your right hand.
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[witnesses were sworn in] >> let the record reflect that all witnesses answered in the affirmative, and normally we have a five minute clock your reference will have it if you run all over you have the whole show today. jim, you recognize. >> thank you been much mr. chairman, ranking member cummings, members of the committee. i'm very pleased to be invited today to talk about gao's high risk of list update. we do this update as noted every two years with the beginning of each new congress in order to identify areas that we believe are the high pashtun highest risk of waste, fraud, and abuse on this mission oriented need a broad-based reform. i'm very pleased to report with this committee's help, and i appreciate your support, mr.
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chairman, mr. cummings, and committee members, of oversight since our last report and 2011, that notable progress has been made in the vast majority of there is on high risk list. this has been due in part to legislation passed by the congress. for example, the fda authorization act addressed many issues that gao had recommended for improvements, to oversight of medical products and devices. for example, the with drug shortages and also increased inspections, risk-based and foreign operations. congress also passed important legislation concerning the flood insurance program which is also on our list. also, only be and agencies have been holding regular meetings with gao, which i precipitously in in order to focus on solutions and to identify ways to make the necessary improvements to get off of the
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list. this year in a progress has been made that we are removing two items from the list. first is an agency contracting the interagency contracting what has to be a very good and important management tool if done properly. we found back in 2005 they were not done very well. they were out of scope in terms of the contracts, lack of competition. one of the most notable examples was the high recover interrogators for iraq using an i.t. contractor. since then, important procedures have been put in place, agencies have fixed the problem. congress has required the regulations to be reformed for best procurement decisions, and also requiring a business case before new in the agency contracts are put in place in better data no is being collectd in those areas. so we believe that there are adequate mechanisms in place in order to help manage this very important tool to help the
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government leverage its buying power. secondly, we are removing the iris business systems modernization from the list that was originally put on in 1995 due to the iris being mired with management and technical problems with their modernization effort. they have made steady progress over the years. they just deploy the first module, the system which allowed now daily updating the taxpayer accounts which will improve taxpayer service and also the enforcement activities as well. we have reviewed their investment management practices and found that 80% of them needed best practices, and all their project management recommendations do that. they are software development component now has been rated as a computer majority of level three, which means it's a very, that's a good level by industry standards. two important points i would
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make with these areas we're taking off the list. one, we continue to monitor those areas after their off the list. they may be off the list but they are not out of sight. so we make sure that the progress is enduring. secondly, like the of the areas that are eventually come off the list, they come off because of two major reasons. one is sustained congressional oversight, oversight and in agency contractors congress insisted on a port reforms, required the ig to do continued reviews in this area. the irs area congress required an annual expenditure plan every year and a gao review. so as continued congressional oversight can pay enormous dividends in resolving many of these problems. the two new areas where adding this year, wind is limiting the federal government's fiscal exposure by better managing climate change risks.
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it's clear the number of disasters have gone from in 2004, intervening 65 to 98 in 2012, which is a record number of years. there's indications that the severe weather events, both by national academy of sciences and by the governments global change management research program, that there will be more events occurring, more costly events. the federal government has enormous exposure to these risks. first, it's one of the largest property holders of the government, the nation. hundreds of thousands of buildings that the federal government owns, and also defense installations along our coastline. also, a program that holds 29% of the property in the united states, and manages that property. also manages the flood and crop
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insurance programs which we recommended take into account climate science issues and revamping those programs. the government is also the provider of disaster aid, over $80 billion over the past year before the assistance for hurricane sandy, we found that the criteria for the federal government intervening in a disaster is an artificially low level. ..
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>> there's no overall central diren and priorities that are set for that area and coordinate at the federal level or with the state and local government. i know, mr. chairman, you made that point this morning. that's in our report. it's very important that the federal government provide technical information to weather-related issue to state and local government. huge amounts of infrastructure. the federal flood insurance programs and the crop insurance programs need to be reformed, and we need to set better criteria that takes into account the federal government's fiscal condition right now. the last area we added on the list is gaps in weather satellite information due to management problems and acquisition problems over the years. right now the gaps in the polar orbiting satellites that provide early, midday and afternoon warnings to field computer
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weather prediction models and to provide the three, four, and seven-day forecasts has a potential for a gap to occur as early as 2014 and could last up to 53 months. this is very important. without that information, you know, one credible organization has said that the information from the polar orbiting satellites, the prediction of the path for superstorm sandy would have shown it going out to sea and not hitting new jersey at all. and so without this critical information, there are property, lives, economic consequences. and so we're adding this area to our high risk list. we've -- at our recommendation, cop tin general si plans have been developed, but they need to be executed, monitored properly, and i think congressional oversight could be very beneficial and necessary in this area. so, mr. chairman, that concludes my broad overview of the major changes on the list. there are 30 items now remaining
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on the list, and i'd be happy to answer questions. >> thank you. and i'll now recognize myself for a few quick questions. first of all, my understanding from your report is that the fda has not really solved its problem of meeting its responsibility for drug availability, that that continues to be an area in which the american people cannot count on both generic antibiotics or chemotherapy drugs being in proper supply based on this failure, is that correct? >> they still have to step up and make some changes in order to do that. congress now has given them the authority to have drug manufacturers notify them in advance of shortages which is a very important step and consistent with the prior gao recommendation. but they must follow through. and once they have that information, they must then take action. so we're going to carefully continue to monitor that
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situation, mr. chairman. there's also areas that we pointed out where today need to -- where they need to make sure that they do postmarket studies to make sure their recalls are done properly as well. so both those areas are on our radar screen. >> thank you, and i appreciate that. your concern on fha, if i understand correctly, is that pause they issue -- because they you should shoe, effectually, zero-down loans, very similar to the loans that got us in trouble with freddie and fannie, that any reduction in home values even short term could put fha in a similar situation to freddie and fannie, is that correct? >> their financial situation is precarious. they are, there's high risk. there are capital reserve ratios below the levels that it needs to be, and so we've added it to the list to highlight that and also the fact that in resolving
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the freddie mac and fannie mae situation and taking them out of conservatorship which the congress still has to do -- we have modernizing the financial regulatory system on the list -- that fha system needs to be taken into account and there be an integrated set of activities there so we don't increase the risk even further to fha. >> and i'll summarize, if you will, from the way i heard it: you don't fix freddie and fannie unless you fix fha at the same time. they're all, if you will, subsidized or opportunities that could lead to the federal government putting up billions of dollars again if anything goes wrong. >> that's exactly right. it's all about softing what the -- solving what the federal government's proper role should be in the housing market. >> and if i understand correctly, when you said that by not indexing this $1.36 per capita that 25% would not even
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have made the list, effectively what you're saying is we have shifted 25% more things which are in constant dollars state responsibility, we've shifted them onto the federal back, and that's a substantial amount of billions of dollars, is that correct? >> that's correct, mr. chairman. and we've recommended that f -- fema revise the criteria to take into account states' capability to be able to pay there as well. and they've agreed with the recommendation, but i think congressional follow-up would be helpful. >> appreciate that. and i guess lastly, along the psalm -- along the same line, if, in fact, we continue to see water levels rise around our coastlines which represent about half of our states, effectively you've looked at federal installations as one of the risk areas. in other words, we need to build and plan both naval and other
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military installations and federal property based on the assumption that, if you will, things change, and where you built one, two, three hundred years ago -- because some of our forts are just that, they're revolutionary period forts -- need to be planned in a way, essentially, you're calling for internal zoning that the federal government begins making decisions that abate likely changes in water levels and storms and so on. >> yes. yes, definitely. defense department's already recognized this risk and beginning to act on that. in fact, the congress also recognized this risk when it passed the biggert-waters act this past year. in fact, fema before was prohibited from taking into account erosion over time, and now congress has required that climate science be included in fema's further efforts on the flood insurance program..
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yeah, please. >> my understanding is both of our major insurance programs are not run in a way in which the private sector would run their insurance. meaning, we don't adjust our rates to meet the likely payout. instead they are fixed in time, and so they can year after year after year come up short, ultimately shifting to the taxpayer the responsibility for paying out what should be insurance by the insured. >> yeah, that's correct. we've recommended they use better practices. they've agreed to do that, they've contracted for studies, but the results haven't yet been provided to the congress. this is very important. and the flood insurance program even before superstorm sandy, flood insurance program owed the federal government back over $20 billion. the likelihood of that getting repaid is not high. >> well, i certainly in closing would say if i could be insured for the less than the risk, i would always buy that insurance. i recognize the gentleman from maryland for his opening -- for
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his questions. >> thank you very much, mr. chairman. mr. dodaro, let me go to page 202 of your report where you talk about the drugging shortages. want to pick up on some of the things that the chairman was asking you about. you know, we did some preliminary research and looked into this drug shortages, and drugs that were life saving drugs, chemotherapy drugs, one of the things that we found in our research was that we had a gray market going on out there where a drug might start out from the manufacturer costing $7 a bottle, and by the end of the week because of the gray market maybe selling for $700 a vial. we also had an opportunity to talk to doctors from all over the country, as a matter of fact, one doctor from south carolina, i'll never forget it. she came in, and she at -- she t
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a major medical facility. and she said, sadly, we are performing medicine like we're in a third world country because of the shortages. so it is a major, major area. and i notice europe comments, but -- your comment, but i'm just wondering, did you go, did you look into at all the fray market situation -- the gray market situation where people are improperly ratcheting up and hoarding drugs and jacking up the cost so that we've got the american hospital association now saying that 99% of their hospitals have drug shortages? i mean, did you all look at that at all? or you just looked at it from an fda-monitoring standpoint? >> are we primarily looked at it from an fda-monitoring standpoint. i can do go back and look, mr. chairman, if we have looked into the gray market issue, we can
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provide something for the record. >> well, you may want to look at that because you've made some very good comments here on page 202, um, but, we also i think just look at it from an fda-monofor to having standpoint is -- monitoring standpoint is, perhaps -- i mean, it's good, but if we have an underlying cause of greedy people on a daily basis literally taking drugs out of the hands of a hospital ranked number one in the world in my district, johns hopkins -- they told me this -- and they can't have the best jobs possible to treat our constituents because people are hoarding them and putting them on the gray market and jacking them up a hundred times, that's a major problem that goes to so many things; to our economy, of course, it jacks up the cost of medicine, it's a detriment to many of our constituents with
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regard to health care. so i just want you to -- and would you give me something back on that to let me know how deep you went into it? >> sure. >> one of the things the chairman was saying, making it a part of our scope of inquiry this session, the next two years is looking not only at the fda piece of this, but looking at in the whole thing -- this whole thing of the gray market. so i'd really like to sit down with you if you haven't delved into it and see where, you know, what we might be able to do together to try to get to the bottom of that. because it is a very, very serious problem. a lot of americans do not even know about it, but it's very serious. i want to very briefly go to this whole issue of climate change. gao recognizes that the federal government has a number of efforts underway to decrease domestic greenhouse gas emissions. the success of greenhouse gas
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emission reduction efforts depends in large part on cooperative international efforts. however, limiting the federal government's fiscal exposure to climate change risks will present a challenge no matter the outcome of the domestic and international efforts to reduce emissions. in part because greenhouse gas is already in the atmosphere, it will continue altering the climate system for many decades. so if i understand this, the carbon emissions that are in our atmosphere are already altering the climate system and will continue to do so for the foreseeable future, is that correct? >> based on the information from the government global climate change research program and national academy of sciences, that's correct. >> is it the goa's opinion that regardless of the outcome of global decisions to reduce or carbon emissions, the united states should take immediate action to mitigate the risk posed by the climate change?
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>> yes. >> now, you heard the president's testimony the other night in the state of union where he talked about these catastrophicwet-related incidents seeming to come at a greater pace and costing us billions upon billions of dollars. um, what are you just -- as you close with my questioning, tell us what you are recommending again for us to do with regard to these catastrophic types of things, storms like sandy that's costing us so much and costing such unconvenience to our citizens? >> there's several things. one, we think the federal goth needs to be better organized and there needs to be a better coordinated effort with a streej you can plan and a focus on priorities. we looked at all the federal spending. federal government's spending a lot of money on these areas, but it's not well coordinated, target and prior toized.
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is that's number one. particularly important in our budget environment where we have to make every dollar count and the best investments possible. second, we need to partner with the state and local governments. we these to provide -- we need to provide them better worth-related information. they're making huge investments in infrastructure, so in terms of figuring out how to deal with roads, bridge, tunnels, etc., and provide adequate interpretation of the science data and make those decisions, that's very important. we need to get our act together on our flood insurance program and our crop insurance programs and make sure that's developed popperly, and we need to look at how we provide and what the criterias for when we interview in disaster assistance or whether it should be a state and local responsibility. >> thank you, mr. chairman. >> i thank the ranking member. the chair now recognizes the gentleman from florida, mr. mica, for five minutes. >> well, thank you, and i'm pleased our committee's looking at the gao's 2013 high risk
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list. this list is probably a good template for looking at ways in which we could have dramatic savings. right now we're practically bankrupt approaching $16.5 trillion in debt. i was bond oring, sir, this list is pretty extensive. there's a lot of bad news. there's a little bit of good news you shared in a couple coming off the list, but wouldn't you estimate there could be tens of billions in savings from the recommendations in these high risk areas that you've provided? >> that's true. >> yeah. and i think that's why it's so important our work continue. while they're focusing some on this one report that our committee has produced, it's billions of dollars in medicare misspent on new york, everyone should read that, see?
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it's tens of billions of wasteful spending, programs out of control. a program, medicare, which is so important to provide those that need health care in many new york alone tens of billions of dollars outlined here wasted. have you seen this report, sir? >> no, i have not. >> i hope you do and would confirm that. now, i chair a small government operations subcommittee, particularly interested in managing federal real property. we've heard you testify and others that we own thousands, tens of thousands of buildings, structures, the bigst property owner in the world probably. 29% of all the federal, of all the property in the united states is either owned or managed by the united states according to your report, is that correct? >> that's correct. >> well, we're going to do some hearings that will probably start with the risk of high risk
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list that you provide us in managing federal property and look at it. i've been at it a week or two. i went out -- well, what's stunning is we did a little bit of this in the transportation committee, nobody has control. i was in, i was in real estate, i think the last folks i'd ever give anything to manage would be the federal government including assetsment would you give your real estate or assets to the federal government to manage? >> only with great many conditions. [laughter] well, we went out last week and looked at a million square feet of space in springfield, and i just looked at it from a management standpoint. you've got a million square feet, a lot of acreage in springfield, virginia, not well utilized. does can anyone look at the specific properties with a management plan or the best utilization of that asset for
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realization of taxpayer dollars? is there -- >> there, we have been encouraging better oversight over that issue. >> but i don't see it. >> yeah. >> i mean, i could go through that, and as a property manager -- >> right. >> to have that valuable asset there, it might have made sense 20 years ago but not today. then the other day we went out and looked at 7,000 acres, nearly 7,000 acres in maryland, mr. cummings, and we have an agricultural research center there dating back from maybe the turn of the century. they have 500 buildings of which there are 200 that either need to be demolished or are unusable. what stunned me was there was no plan for utilization of either the acreage or the facilities. do you know of a plan to -- or do we have any mechanism to even require an agency to have a plan to deal with those assets? >> yeah.
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we've been making recommendations along those lines. one of the things that we find is when went out and did the type of inspections that you're talking about doing, the data didn't match the database. >> they said i was the first member of congress, i think, since mr. hoyer to go out there. >> yeah. >> it was beltsville -- >> i know where you're talking. >> and nobody has a clue. i mean, there is an incredible asset sitting there. in fact, i think some prohibitions have been put on doing anything which just is mind-boggling. again, from somebody who's dealt in real estate in the private sector. i think we're going to work with you all to see if we can't get some of these agencies to have plans to maximize those assets and utilize them. the lease, you point out in your report here, lost $200 million in leases since 2005. again, it's only a quart or of a
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billion here and a quarter of a billion there, but we're bankrupting the nation through policies and practices and lack of attention to maximizing our assets. so we'll be back. i think we're going to try to do this on february 27th and work with the minority to set a date and launch a little bit more in depth on this report. >> sure. >> we thank you and others for working with us. yield back. >> i thank the gentleman. the chair now recognizes the gentle lady from district of columbia, ms. norton. >> thank you, mr. chairman. and, mr. dodaro, i want to thank you for what is always an illuminating report, but particularly for adding climate change for the first time as a risk for the federal government. this has come at a time when it could not be more needed. we needed the --
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[inaudible] of a objective government agency. climate change is not political, and we make it political at our own risk. i recall in the past two congresses we've been dealing with 100-year flood. kind of a silly thing to even think about calling it now. and even as we did label it 100-year flood in four states to update how they go about preparing for flooding, we recognize that 100-year was a term of -- simply to make people understand what was regarded as a rare event. at least in terms of floods. well, we've gone from rare to routine. and to unheard of. sadly, during the -- after sandy there was a very contentious
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debate in here about what to do, and i think part of that comes from the unpredictability of budgeting for such events. now, nothing of the kind in memory had been seen by new york state, so there was no way to plan for that. and there was certainly no way to budget for that. it was so unusual. to take another example shortly after that, was it last week that we had the snowstorm that went all the way up into new england, and then it had a wind current that resembled a hurricane, you know? try preparing for that. and yet you name ways in which we are highly vulnerable not only what we own, but the assistance that we give, the dependence of states on us, emergency aid and the rest. this is very, very troubling. and one of my questions goes to we -- it's easier to predict the recession or a downturn in the
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economy than it is to predict one of these events. we see flowers growing in the winter time -- [laughter] we don't know whether tomorrow is going to bring springtime weather or a snowstorm. and so finally the country which when climate change was first discussed, the majority of the american people said, yes, we think there's climate change, and something has to be done about it. the last 12 or 18 months has produced a comeback in the public on an understanding of climate change. you can understand during the recession that people doesn't want -- said they no longer, quote, believes -- i don't understand believing in when it comes to science. i need to know from you, you know what our budget, how our budgets, of course, are developed. it's one -- and i accept what you say about the coordination
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of the federal agencies and the rest. but i have to ask you, mr. dodaro, how do you budget for the unfathomable and avoid partisan debate when they come up? i mean, i heard some members from new york who had never seen a disaster, so you just wait, i don't know, somebody from mississippi got up and opposed it. well, that's one of the parts of the country that does not need to get up on its hind legs about this issue, because we have readily come forward time and time again. i said, i hope that's not the way you look at it. i hope you look at it as an example of voting for. what happens in louisiana some tornado, someplace where it's unheard of. but i don't accept that the present budget process is at all responsive to this new world of climate change, and i wonder if you could give us help. >> right. >> on how to go about in a
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budget world in which we live making these, these funds available wherever they occur rather quickly without the kind of contentious debate we had here over sandy. >> yes. there are two things i would say. first, that we should not pretend that disasters do not occur if our budgeting process which right now we do not budget for anything that might occur. now, there's a historical record here that shows over time how much we've always, you know, provided over a period of time. so you have historical data that could be used to provide, you know, in anybody's budget, a household budget or whatever, you'd have a contingency plan. we don't have contingency plans in our process -- >> even for the kinds of disasters that could be expected? >> right. that's correct. >> let's begin there. >> that's a starting point.
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secondly, we can revisit this criteria of what we decided the federal government to pay for and not to pay for and what should be absorbed at the state and local level. it's badly in need of upgrading, so that could give you a better indication for budgeting purposes as well. third, we need better data on weather-related potential changes, good science data that could objectively be collected and provided to state and local governments and the federal government to make investment decisions to justify budgetary investments that will then yield proper information in the future. and then we'll have to, you know, there's going to be, obviously, things always that are going to come up that you don't expect, but right now we're pretending we don't expect anything, and that's not reality. >> well, we do budget, we do budget in expectations that there will be hurricanes, and then we're told that fund has been used up -- >> right. >> -- by the most recent hurricane. >> right. and there's revisions that are made after disasters are in place about the additional money
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that's needed during that period of time. there's not -- the budgeting system is in need of reform for these type of efforts. i agree completely with your view. >> thank you, mr. mr. chairman. >> thank the gentlelady. the chair now reck nudeses the yes -- recognizes the gentleman from utah, mr. chaffetz, for five minutes. >> thank you, mr. chairman. and thank you for being here and the great work that people do in the agency. it's a critical role in the audits that go on. i want to touch on three topics, i want to start with the federal real property. i have introduced a bill with mr. quigley, h.r. 328, to try to dispose of these properties, but could you give me some further insight? the number has greatly fluctuated on the number of underutilized buildings. fairly recently, the gao had estimated the 45,000 properties that are underutilized, that number's now 71,000 that are underutilized. yet the annual operating costs remain at about a billion five.
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why the fluctuation? >> i'm going to ask mr. herr to answer that question. >> that'd be great. >> congressman chaffetz, one of the areas we've done recently is look agent the database that gsa and omb maintain, and we found, as the comptroller mentioned, there's a lot of enact rahs accuracies, and we've been pushing -- >> when you say a lot, are we talking about in the tens of thousands? >> one of the challenges is there's about 400,000 properties, and there's another 400,000 structures not including the postal service. is so getting a comprehensive view of that, our suggestion and recommendation is gsa and the agencies do a better job of looking at their inventories -- >> give me -- i'm looking for more specifics on. i mean, it just seems to me we ought to be able to pull up a list and be able to see all the real property this country has. we can't do it even within my state of, the real property just in the state.
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so why? we don't even know what we own. >> that's -- there is, that's part of the challenge. in fact, mr. mica mentioned the facility out at usda in beltsville. we had a team visit there last year to highlight some of the problems that he was mentioning. this is part of the challenge, getting your hands -- >> how inaccurate is it? are we missing 1%? >> i -- well -- >> based on your sample. >> talk about the ones we looked at. >> well, the ones we looked at we found errors, for example, in the valuation of the properties. but in terms of a sample we could generalize statistically across the country, we weren't able to do that given the sheer numbers involved and what it would take to do a stamp -- sample. >> but in the sample we did look at, we found a number of areas. i'll provide the specifics -- >> that'd be great. >> but i was concerned must have with the level of errors that we found in the small sample to be concerned enough to make the recommendations. i would have liked to have had a
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project bl one, but we just don't have the resources to do that. gsa is taking a broader sample and looking. we have not seen their results yet. so we'll follow up on and provide those two you as well. >> clearly, it's on the high risk list. this is why you're highlighting it. you talk about the inaccuracy of the data. what i'm concerned about is in a 24-month period or so you went from 45,000 properties to 71,000 properties. that's not a small jump, and we're talking about real property here. this is, these are big, big as sents and lots of -- but the dollars didn't change. i mean, you still projected $1.5 billion, and it's -- and yet the number jumped by about 50 plus percent. so that's just a concern that i would like to continue to follow up on. and i just physically don't understand how the gsa lost $200 million on leases since 2005 including $75 million in 2011 alone. i mean, that's -- the why we use
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the gsa is to insure we don't make those kinds of mistakes. >> the agencies do do a good job of sharing resources. for example, they're not really looking and being encouraged to share space or minimize their space use and bring in other agencies to work with them. >> well, and one of the -- you know, i don't have the a federal building in my congressional district, but i know that as we looked at just our own office space, it was unbelievable how much more expensive going with the federal building in salt lake city would be. i mean, it was ridiculous. so much so that i believe our senator said i'm not paying that rate, i can't afford it. and if they just simply go across the street, they would save significant dollars in doing so. so i appreciate looking -- mr. chairman, i was going to look at three different topic, we barely got through one, but i don't want to hog the time.
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i know mr. goudy is anxious with 20 minutes' worth of questions, so i will yield back the balance of my time. >> i thank the gentleman. the chair now recognizes the gentleman from virginia, mr. connolly, for five minutes. >> thank you, mr. chairman. and welcome, mr. dodaro. on page 88 of the report, you talk about the high risk of the postal service. did you at any time consult with the general counsel of your organization with respect to the legality of the announced proposed action of the postmaster general having the legal authority to two from six -- to go from six to five days a week? >> after the decision was announced, i have asked our attorneys to look at the information. they've talked to the postal service and have obtained their legal analysis. they believe the argument to be novel, but we'd have to look at it more carefully in order to provide a full legal opinion on the issue. >> i don't want to box you in,
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so what i hear you saying is that your attorneys, your general counsel and yourself are still weighing the legal arguments coming from the postmaster general, is that correct? >> that's correct. >> would it be fair to say, however, that informally the general counsel of your organization has expressed, for example, to the committee staff of this committee some skepticism as to the legal reasoning behind postmaster general's announcement? >> well, i don't want to speculate informally on anything. i mean, one of the -- >> i'm not asking you to. >> right. >> excuse me, general, i'm not asking you to speculate. >> yeah. >> did or did not such an informal conversation, in fact, take place where the staff of this committee? >> well, one of the things we do is ask a lot of questions, so it might have -- i'm sure they asked questions about the issue. >> well, let me -- certainly, we would welcome your opinion when
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you are ready to render it. there are many of us here who think it's an illegal act, and this is a nation of laws, and even the postmaster general of the united states has to follow the law. but it's in our report, i think it's a relevant question, and we would very much welcome your opinion. before congress acts. climate change, general dodaro, what made you decide to add that this year? what about the science and/or the potential consequences of climate change made you decide to -- and i applaud you for doing it -- but made you decide this year it merited inclusion in this very thoughtful report? >> yeah. well, there were several things. one, we had issued at least three critical reports over the past two-year period, one on the disaster aid limitation, one looking at the finding, the funding of the federal
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government by climate change issues and finding there was no strategic direction in the climate change area. obviously, we also looked at the number of disasters that have been occurring. the flood insurance program's already on the high risk list. we were concerned about gaps in weather satellite coverages, and so we decided to take a, you know, broader look at these issues. and i felt also given the federal government's precarious financial situation that it couldn't afford not to try to limit its fiscal exposure in the future in those areas. those are the factors that i considered. >> but as a sort of a preface to all of that, there's a certain operating assumption that the science is fairly compelling. >> we take the information from the national science academy of sciences and the global climate change research program at
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faith. and we're -- an important point is that we're not questioning what may or may not be causing the situation. we're saying that science shows there is an issue -- [inaudible] >> and we need to do something about it. >> yeah. >> we're not getting into the policy areas of where there needs to be change in how we mitigate whatever might be causing this. or the international issues that need to be done. >> right. >> we're saying we have a problem, we need to deal with it. >> >> i'm sure the fact that there are some even in the congress who don't go as far as you do, however, who still are denying the science and are denying there's a problem. let me ask, in your analysis, rusk able sis -- risk analysis, have you also looked at the military base, especially naval base implications? i think, for example, norfolk. >> right. >> in virginia many of us are very worried that sea rise could
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jeopardize, you know, the oldest and largest naval base in the united states. as well as facilities in florida, possibly even south carolina. have you looked at that in terms of dollars and cents, relocation costs, you know, reinforcing costs, whatever it may be to try to protect those facilities? >> yeah. we note the defense department vulnerability in the report. we will plan to do more work on those issues going forward in this area. >> mr. chairman, thank you. i would, i know the committee would welcome that as well. especially dollars and cents implications. because i think, i think some people may be very surprised at what we're looking at. thank you, mr. chairman. >> i thank the gentleman. the chair now recognizes dr. goeser from arizona for five minutes. >> thank you, general, very, very much. i'm going to harp again. being a health care provider, i want to ask you more about these
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drug shortages. do you think your resources are efficient to mitigate this? i believe so. we made those recommendations just to reiterate that they need to strengthen their program by assessing their resources systematically tracking data on shortages concerning the availability of medically-necessary drugs. the strategic priority in developing relevant results-oriented performance -- >> let me ask you a question -- >> yeah. >> do you believe the fda is part of the problemsome. >> they need to make changes. >> they need to make big changes. >> to be part of the solution to the problem. >> well, i think part of our problem here is i'm looking at our drug in-stock affidavit as of yesterday. i mean, we've got problems with liquid ibuprofen, with anesthetics. this is critical mass, because we're putting patients in harm's way and physicians in harm's way, making them use protocols
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and medications that are in many cases have stamm more side e -- substantial more side effects and problems for patients. this is critical maas. it's not just with pharmaceuticals, but also our medical devices. we have reached a saturation point where i will disagree with you, i do not think that what you have put out here in your outlines are suitable for reform. i think we need to have thorough fda reforms in regards to not only drug manufacturing, but fda's role in oversight. you look at, you know, in your report you cite globalization. you know, we don't even control a vast amount of some of the products that go into manufacturing of these drugs or medical devices. and we're becoming problematic that we're dependent upon so many other countries to do that. would you agree with that? >> well, it's one of the reasons they're on the high risk list is due to the globalization.
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i have -- >> well, it seems to me like what we're doing here, we have a disease here, and what we're doing with this report is we're treating the symptoms, but we're not treating the disease. part of the disease process is the fda itself. and it seems to me that what we need to do here is reform the fda. would you agree with that? >> well, i definitely think there needs to be changes. >> do you think we need legislation to -- >> i'd be happy to provide our recommendations for the record. >> okay. one of the other things i did want to touch about, and these drug shortages, 50eu6 got to tell you, this affidavit just came from tucson and from the northeast, so it's not specific just to rural or urban areas. these are critical shortages that have to be addressed, and i don't like that -- i don't think that the hypothesis or the conclusions you come to are real. i think we're actually worse shortages. just because we put out a report doesn't mean that we've remedied it. we've actually made some of the
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problems even worse for the gray market. now we understand where we hoard, where we take, where we increase the sales. so we've got a huge problem here. to go back to my colleague, mr. chaffetz, in federal properties. i want to give you a real clear example of federal properties that have a problem. we just got back from a codell in regards to the state department looking at our embassies, and in particular i want to highlight morocco. here we are spending over $150 million building a new embassy in morocco, and we have yet to assay and look at what the value and possibility of sale of our current embassy. right there to me it seems like in looking at properties -- i'm not a real estate expert, but it seems to me when we're making a transaction like that, we're looking in the neighborhood of somewhere to $60-$80 million in assets that need to have some assaying. do you know that they had to beg
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and as of -- there were about, i would say, wouldn't you say it's about 50% completed, that embassy, chairman? >> that sounds correct. >> yeah. they have yet to have an assay of the current buildings and inventory of properties that they had in morocco. i find that disdainful. this is an instant turn around of quickly $80 million, and we shouldn't be building unless we actually know what we have in inventory and make sure that we're selling it. that is disrespectful for the american taxpayer. i'm just giving you one example. extrapolate it to great britain. it's my understanding we're building another embassy for a billion dollars there. what other assets do we have there? this is critical mass that can turn money very quickly. so i think some of the things we need to do is start looking at the disease process, make sure that we have clear examples, enforce those examples with legislation or retaliatory oversight, and then you're going to get compliance in a lot more other aspects.
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so i would loo like for the record, mr. chairman, an example of the drug shortages as of yesterday to be placed in the record. >> without objection. the gentleman's time has expired. the chair now recognizes the gentleman from south carolina, mr. goudy, for five minutes. >> thank you, doctor. general, i want to ask you about two areas. first, weather satellite. i'm asked from time to time which is tough for a lawyer to understand the science and, so can you help me understand how we got to this crisis and what an acceptable remedy would be for it? >> yes. i'm going to ask dave powner, our expert in this area, to come up, and he'll give you a great explanation. >> great, thanks. >> congressman, this is ap area that kind of grew over the years. we had a triagency program to put in place polar orbiting
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satellites. if you go back several years, there's a long history of cost overruns, technical problems, mismanagement in the program. what happened was the launch dates kept getting pushed, and what we did is we kept buying time with operational satellites. if you fast forward now currently, we're in a situation where in the 2016 time frame there's a satellite that basically is going to reach the end of its useful life, and we're not lawn will having until 20 -- launching until 2017. that's the best case situation. that provides about a 17-month gap in satellite coverage. and depending on if that satellite lasts less than what's expected or if there's any further delays, that gap in satellite coverage could actually be more. so we're looking anywhere from 17 to 53-month gap in satellite coverage. our recommendations to noaa have been to put in place contingency plans to address those gaps. >> what do you expect those
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contingency plans to include? >> a couple things. one is you could look at, one, extending the current life of the existing satellites. there's things you could currently do with that. there's a possibility of moving up the launch of the current dates. those are unrealistic in some ways, but there's possibilities if you look at those various schedules. and then if you look at the contingency plans that need to be put in place, various things. you can use other government satellites from dod, foreign satellites are an option, orr weather observations are an option. but all those have certain things that go with out. so, for instance, if you use european satellites, there's changes to our ground stations. so there are associated costs with all those different contingency plans -- >> do you think there is a reasonable probability of a gap, a gap that would have significant consequences to us? >> right now there is a high probability of a gap that could be 17 months. >> wow.
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all right. thank you. general, last area. my colleague from maryland very appropriately and commendably remembered a doctor from charleston, south carolina, michelle, who came and testified quite emotionally about having to choose between which of her pediatric cancer patients she was going to treat because of a drug shortage. so, again, for folks who may not be following this issue just watching from back home, how did we get in this circumstance? and with specificity particularly for those who clamor for bipartisanship -- because it exists on this issue. mr. issa and mr. cummings both would move heaven and earth tomorrow if we could to remove shortage. so what legislatively or from an oversight perspective can we do to remedy the drug shortage? >> well, the first step was taken in the last fda
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modernization act last year which gave fda the authority to require manufacturers to notify them. that was part of the problem, step one, in order for them to do something about it, they needed to have adequate information and to know about those issues. so that aspect has taken shape now. but the question is, what are they going to do with that authority to turn it into action to try to provide adequate information? i will go back and for the record, as i mentioned to congressman gozar, provide additional recommendations on things that could be done in this area. we have an expert team, they just don't happen to be here today. but we'll provide you more specific suggestions. >> well, we would be grateful because, again, i know that there is a, there's a desire all across this dais for action. and for those who desire work across the aisle which i think includes all of us, this would be a very appropriate way.
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so we would be very anxious to see your recommendations. and with that i would yield back to dr. desjarlais. >> i thank the gentleman. i will be going to the gentleman from pennsylvania, mr. cart wright, for five minutes, and i want to apologize to the gentleman from nevada, i did not see you there, so we'll go next to you right after mr. cart right. the gentleman from pennsylvania's redded -- recognized. >> thank you, mr. chairman. well, mr. doe row, according to -- dodaro, according to the united states global change research program, the impacts and costliness of weather disasters resulting from floods, droughts and other events such as tropical cyclones will increase in significance as what are considered rare events, quote-unquote, become more common and intense. due to climate change. now, the federal government's
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crop insurance costs have increased in recent years rising from an average of $3.1 billion per year from fiscal years 2000 through 2006 to an average of $7.6 billion a year from fiscal years 2000 through 2012 and are projected to increase further. do we, do we have a seasons of the scale by which climate change will increase the federal fiscal exposure for the national flood insurance program and the federal crop insurance corporation? >> i don't have, you know, estimates of that regard, but i am concerned about the potential magnitude given what we've spent so far to respond to these issues. so we're going to be looking at the quantification issues, if you will, as we delve into this issue in the future. >> well, that leads to my next question. i suspected you might say that,
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and is a study needed to look at those issues further, sir? >> yeah. i believe so. but it will, as with many of these areas, be difficult to come up with some areas. but i think we can, we have some work underway this that area right now. we'd be happy to brief of you on that and provide the results when they're ready. >> thank you. and secondly, gao recommended in may of 2011 that the appropriate entities within the executive office of the president clearly establish federal strategic climate change priorities including the roles and responsibilities of the key federal entities taking into consideration the full range of climate-related activities. in 2009 gao also recommended that the appropriate entities within the executive office of the president develop a strategic plan to divide the nation's -- to guide the nation's efforts to adapt to
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climate change. furthermore, federal agencies released draft climate change adaptation plans on february 9 as part of their strategic sustainability performance plans required by executive order 13514 on federal leadership and environmental energy and economic performance. the u.s. gcrp also has a strategic plan for climate change research. how are contingency plans being coordinated across the federal government? >> that's our main point. we believe, you know, they have the plans, but they're not being coordinated as well as they need to be. >> and do these plans amount to a government-wide strategic plan at this point? >> not in our view, and that's our main -- one of our main recommendations. we plan to work with the executive office of the president and office the science, technology and policy to underscore what needs to be
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done. >> well, i thank you for that answer, and i want to say that's why i will be working with the gao to address two specific concerns they've highlighted in this report. first, i'll be working with the gao to find the best possible way to coordinate the various adaptation reports required by the executive order and to come up with a national strategic plan to prepare for this grave threat. so i thank you for your appearance here today. mr. chairman, i yield back my remaining time. >> i thank the gentleman and, again, thank you for your patience, mr. horse berg, i now recognize the gentleman from nevada for five minutes. >> thank you, mr. chairman. thank you, general. i want to commend you and your team for what is a very good blueprint for the critical challenges or that are facing our federal agencies and not only that you identify the high risk areas, but you also outline what needs to be done.
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and i would point out what needs to be done by congress in large part to move some of these issues forward. my focus, i'd like to turn to, is transportation. the gao report lists funding for the nation's surface transportation system as an area of high risk for the government, and the moving ahead for progress in the 21st century act which was enacted last year provides some surgeonty for state -- some certainty for states. but it also reduced overall funding for highways relative tofiscal year 2011. and it will not provide the funding that we know that we need to bring our infrastructure to a state of good repair overall. i'm from nevada, and be our unemployment -- and our unemployment rate still stubbornly high. our number two industry has been the construction industry, and
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in large part by focus is on how we can create jobs and get our economy moving while at the same time investing in critical infrastructure needs. so the report indicates that the 18.4 cent per gallon tax on gasoline that was enacted in 1993, it's only worth about 11.5 cents today. the report goes on to note that the cbo has estimated that it will take $110 billion in additional revenues to maintain current level of spending plus inflation through 2022. so in short, in the short term, are will any realistic alternatives to the gas tax to fund transportation that would maintain the user-pays principles that have been at the
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heart of transportation funding in the past? >> yeah. i'm going to ask -- i'll start out, first, -- but, phil, pleas. phil herr is our transportation expert, i'll let him talk. unfortunately, the approach that's been used in the last several years is to use general fund appropriations in order to supplement the lack of funds from the highway trust fund to be able to do that. that's not a long-term answer to the situation particularly given the federal government's deficit and debt issues. so other things need to be looked at. but that's the main reason it's on the list, is in order to try to get the congress to come to grips with the financing structures there. but let me have phil elaborate, congressman. >> we've done some additional work. there's a program called tifia which is a loan program that helps incentivize private investment in this infrastructure. we've also completed some recent
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work that talks about other options for collecting revenue that would supplement the gas tax as well. but those, obviously, involve some policy trade-offs. there are options there that you correctly point out with some of the limitations to the gas tax are. >> so if i could, mr. chairman, just to follow up. so with the from voice that requires -- the provision that requires states to spend annual allocations on the improvement of bridges and intertate pavement, should -- interstate pavement, should -- what happens if the conditions fall below those standards, and are there considerations given to states to use other types of funding sources to make up the gap? >> it's an interesting question. this was just enacted with map 21, so dot is still working with the states on the targets and processes. but our understanding is the legislative fix put in with map 21 states would need to dedicate money to some of these national
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projects that have more national significance. >> can they back fill with any additional funding outside -- >> i would have to get back to you for the record to see how they're rolling this out. >> okay. and just to close on the passenger rail investment improvement act of 2008, again, this is a critical opportunity for our need to connect las vegas and los angeles, what risks has gao identified with this program, and what happens if continued federal investment is not available to achieve the goals? >> in the high risk or the high-speed rail, we actually have some work ongoing now, but in recent testimony one of my colleagues gave, we identified some of the problems with some of the cost estimates that are made available. seeking federal funding, so we're looking at ways some of those could be approved so decision makers would have better information. the other thing, though, is in
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many cases high-speed rail's quite expensive. so, for example, in the high-speed rail's situation, their proposal now is calling for a large federal investment, about 38 billion, and then also some private funds. so a real challenge in that area is getting the money to build these and then actually implementing them and carrying them forward. >> thank you, mr. chairman. >> i thank the gentleman. the chair now recognizes the gentleman from north carolina, mr. meadows, for five minutes. >> thank you, mr. chairman. thank you for coming to share your perspective today. i want to take a little bit broader president bush approach. as we start to look at this, you know, your report highlights some of the needs for a performance matrix as you would put it. and in what way can we look at departments and agencies providing information is that we as congress can make a better decision in terms of tying that to the budget or appropriations,
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and what role do you see omb playing in that, if any? >> [inaudible] we have been advocating for a number of years a systematic approach, as you mentioned. measuring performance against established goals in the federal government. there was legislation passed in 1993, a modernization act on that was passed in 2010. and it's really important to your point because agencies are supposed to consult with the congress, establish goals and measures for all federal programs and activities, and then provide regular progress for reports against those goals. so that process now is in its early stages of getting established. we have a role in evaluating whether or not the agencies are doing that. omb has the responsibility for lead in that area, and it's not only goals for individual agencies and departments, but it's cross-cutting goals in a number of areas as well where multiple agencies provide funding to support an overall
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government-wide goal. so there is an established mechanism to do it, but it has to be done properly and well. i'm pleased to see that the law now requires more consultation with the congress, and we're going to make sure that that actually is taking place. >> how can you make sure that that takes place? because, you know, we're in the land of promises here -- >> right. >> -- that says we're going to have this plan and, ultimately -- >> right. >> are -- this is going to lead to a more effective and accountable government. and yet here we are without that. >> right. no, well, we're going to follow through on the facts to see what the agencies have to tell us exactly who they've consulted with. and the law requires them to not only say that, but what they've done with the advice that they've received from the congress. we're going to make sure that works. we're going to talk to members of congress and their staffs, and i'd ask -- chris mihm's our expert in this area, if he wants to elaborate further. but we're doing work in that area. i'm going to make sure it's
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done. >> all right. >> as the comptroller general mentioned, sir, there are statutory requirements now for more robust and continuing consultation on the part of agencies with the congress and other key stakeholders. one of the things we've also been making offers to do working with the committee staff here and on the senate side is to work with members of congress to help them extract that information from agencies. that is, to have the -- not just have it be on the demand or allow the agencies to come up, but have congress start saying we're ready for the consultation, we want to start talking to you about where you are in your goals and your performance and your strategic goals. so we remain available to work with you and your office and your colleagues on those issues. >> all right. and while you're still there, let's look at this. let's talk about this performance matrix and as it comes back to maybe fragmentation, you know with, as was highlighted. so you've got 45 programs across nine different agencies, as you had in your testimony. how do you put together a
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performance matrix without people pointing the finger at this agency or that agency didn't meet our overall goal when we have it consolidated under one head? >> the -- well, the point that you're raising, sir, was exactly one of the two major reasons the congress had in mind when they passed the modernization act. >> sure. >> we had had requirements to do strategic and annual planning that was agency-based. what congress was looking for is a more integrated and cross-cutting perspective. so it requires omb on behalf of the president to have some government wide cross-cutting goals, but also agencies and their goals to identify who else are, what other agencies are involved in the delivery of products and services that are related to the result that they're trying to achieve. one of the things we've been doing, we'll have a report coming out on this shortly, is taking a sample of the goals the agencies have established and beginning to start seeing have they identified relevant
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partners that we had otherwise identified as part of our work on overlap and duplication or that the inspectors general had identified and then following up and say, hey, you seem to have missed someone that's key to youring is. why is that, and how are you coordinating with them? >> you're hitting on a very important point, and there really is no systematic way that this has been done in the past and really needs -- this needs to work if we're going to deal with this in a timely way. >> so is that something that you take the lead on? who takes the lead on -- >> omb has the responsibility to implement the law. we have the responsibility to make sure that they're doing it effectively and providing oversight on behalf of the congress. >> okay. thank you very much. yield back. >> thank the gentleman. the chair now recognizes the gentlelady from california. >> mr. chairman, thank you. and mr. general, let me say that i once again am deeply grateful
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for the work that you and your staff does on behalf of the american people. mr. chairman, this really should be our bible in this committee. we should take every section of this report and in subcommittees and in full committees go through it and save the taxpayers of this country money. by your own earlier testimony, you said there's tens of billions of dollars? are you in a position to tell us how much would be saved by each of the recommendations that you have made? >> it would be hard to give you a precise estimate, but, i mean, just for example in the medicare program alone there are latest estimates of $44 billion in improper payments. so driving that down will save money. we've made recommendations that this pilot program that they have in medicare advantage be canceled, that if timely action had been taken there, that was $8.3 billion --
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>> so if we were to cancel that program and just do the bonus payments as you recommend -- >> right. >> how much would we save? >> i believe -- don't hold me to the estimate, but it's about between two and three billion. >> all right, there's $2-$3 billion, mr. chairman -- >> right. >> -- that if this committee gets serious about really taking the recommendations of the auditor general, we would be in a position to really say we're saving money in this country. i also noted that under the health care area you looked at self-referral. it continues to be a problem where physicians that own an interest in a high, advanced imaging center tend to refer more and that the figure was hundreds of millions of dollars, if i'm not -- >> yeah. i don't have it off the top of my head. i'll provide it for the record, but it was a significant amount of money and a high percentage. >> so do you ever get frustrated that you make all these recommendations, and years go by and nothing happens? >> actually, believe it or not,
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80% of our recommendations are implemented over a four-year period of time. that's been pretty consistent over time. we keep coming up with new recommendations. for example, we in the past at fha we asked congress to act a prohinted seller finance down payment assistance, and that saved over $10 billion because of -- >> all right, okay. so there is some good news. >> right. >> let me move on to another topic, department of defense. >> uh-huh. >> the air force just canceled an ecsf contract that was already, that we had already spent a billion dollars on. and this is a contract that i've asked the committee to explore in kind of a postmortem to find out what went wrong. there was an inspector general report that recommended that they should cut it off. we didn't do it. at some point we the many congress have to take responsibility for not acting. now, there was another report, i
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believe, computer science corporation is the primary contractor for ecsf's project has also been awarded a contract for a planning system called the lmp. just another acronym, but it's for logistics modernization program, and it's intended to streamline the army's inventory of weapons systems. having said that, the inspector general for auditing within dod has recommended that they not spend any more additional money on top of the $1.1 billion already spent on the program back in 2009. so what did we do? we continue to spend money. it now is $4 billion over budget and 12 and a half years behind schedule. when do we stop and say it's enough? when do we stop contracting with the same contractors that are over budget, that don't do the job and, you know, go back to square one? how would you address that issue? >> well, first of all, in the
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rules the contractor's past performance is supposed to be considered in making -- >> obviously, not here. >> well, there are timing issues in terms of when the different contracts would have been let, who knew what where, and importantly at the department of defense, who's sharing information across the department to insure this doesn't happen? in the past we've looked at whether or not people were on the debarred list for getting contracts, and we found that in some cases agencies didn't check that list before they went ahead and made procurement decisions. contracting has been on our high risk list for a long time. the procurement process doesn't always work effectively, and there are high dollar consequences to it. i would welcome congressional oversight and more attention to these areas, particularly in the d. of defense where we -- department of defense where we 13e7d most of contracting money. >> if we made a request to do a
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postmortem on the ecsf program, would you be able to do that? >> yes. >> all right, thank you. >> i thank the gentlelady. the chair will now recognize himself for five minutes for a line of questioning. mr. dodaro, i would like to focus a little bit on health care. medicare and medicaid are both perpetually on the high risk list. medicaid -- or medicare for two decades, medicaid for a decade. together they're responsible for over 58% of all government improper payments in fiscal year 2012. what recommendation does gao make about improving their program integrity and stopping improper payments? >> well, there are a number of recommendations we've made. in almost every phase of their process, for example, enrolling providers we need to keep bad actors out of the system initially. we've made recommendations that there be surety bonds put up by the providers before they're enrolled in the programs, and yet that hasn't taken place yet.
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we think that's important so that the federal government, if there is a problem, can get the money back. we've recommended that there be more analytical procedures in place, data analytics, to spot trends in fraud in the provider area up front. they've moved it forward on that area, but they haven't linked it to the payment system yet so that if they do find a potential problem, they don't stop the payments until they sort through the problem. then before once you get providers in making the payments, doing a good review before you make the payments in the first place, this prevention and detection area before you make the payments really needs a lot more attention. so we've made a lot of suggestions there on how to improve the prepayment controls that they're not standardizing the edits across the providers, the contractors who make the payments. then there's after the payments are made making sure that there's post-look at this area.
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we've made relations there. and then when we find that there is an improper payment that's been made, having recovering auditing go in and retube the money back. -- recoup the money back. we've made many recommendations, i can provide the details for the record. but this is an area that we have a high degree of anticipation on and has a lot of potential payback. >> as we showed, that number's pretty alarming, and would you agree there's no future threat to the solvency of our country greater than health care? >> health care's the primary driver of our projected deficits. >> okay. the patient protection affordable care act establishes requirement percent of medicare and medicaid services to improved integrity. the high risk list notes that cms should implement some of the requirements under the patient protection affordable care act to improve this integrity. why hasn't cms done this? >> i can provide some answers for the record. depends on which area you're talking about.
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the process over there, in my opinion, takes longer than it needs to to implement these changes. i can provide more specifics. >> okay. i would appreciate that considering the, you know, 20 years on the high risk list. i think that we certainly need to target that. um, with the health care bill just really eight months away, implementation, the irs has a large role in implementing the health care bill and the insurance exchanges which should take place in less than eight months. what impact will the irs' system modernization problems have on health care delivery in the united states? >> let me ask chris to come to the table to talk about that. >> you know, we had a hearing on this in the last congress, and we know that the irs was really, frankly, not ready for all that is going to be required of of them. there's going to be incredible
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interaction between future patients and the irs, lots of reporting that has to go on, whether you moved, whether you had a child, whether this is a divorce, etc. i think we established the wait time for someone to call the irs to be, like, 55 minutes. so can you comment on where we're going to be in eight months? as a physician and someone who talks to a lot of physicians, we're not terribly optimistic this is shovel ready. >> there's a couple issues that you're raising this. one is just on the wait time. we've seen that, of course, during the filing season that just the irs has in this last year didn't come close to meeting its goals in terms of how many people were able to get through, and can, you know, did they get busy signals and dropped calls and all the rest. we've made some recommendations to them on the filing season aspect which has implications for what you're talking about. they need to do a much better job in thinking in a broad strategic sense across the various ways that they sewer act with the public -- interact with
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the public being walk-in centers, correspondence, telephone calls, information that individuals can fete through the web and the web is, obviously, over the long term the way to go. >> is it realistic to believe they can be even close to ready in eight months? whether what we've seen more specifically on the affordable care act, we've done a number of reports that have looked at where they are on that, in particular how their infrastructure, that is their governance infrastructure and risk management is looking. i would agree with your point that they have some major risks that they're going to have to be able to manage in order to effectively deliver this because they have, obviously, the implementation or their responsibilities for implementation of affordable care act, they have a very difficult filing system that's, you know, ahead of them. they have other challenges that irs faces, so it's going to be quite a different challenge for them. it's something that we continue to monitor on behalf of the congress. .. finish
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>> i appreciate your work. mr. dodaro, and that of your staff, and i agree with the gentleman from pennsylvania. i also have concerns about the national flood insurance program, because i read recently that 15 of the largest insurance companies are making a real killing off of the program. i think of something we need to look into. but when i read the committee
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memo, it mentions as the biggest of course programs, medicare and medicaid, and the department of defense. and i was here earlier this morning for the discussion on the new york medicaid program, and they said there were 15 billion in improper payments just in that one program, the new york medicaid program. there was one contract paying $5000 daily rate for an institutionalized people. i can tell you, almost every contract in every department agencies some sort of sweet harder insider do. i would bet that that contract certainly was, and the department, and we now spend, according to some of the information we were given this morning, 990 billion on the two programs, medicare and medicaid put together.
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that's more money than almost all the other countries in the world spends total in their complete budgets put together. these costs are just unbelievable, and when people say we can't cut medicare and so forth, well, i don't want to cut any poor person out of the medicare and medicaid, but i'll tell you this, there's a lot of people in companies getting ridiculously rich off of medicare, medicaid. some of those payments need to be, some of those contracts need to be looked into. then the department of defense, almost defense contracts, they hire all the retired admirals and generals and then they come back to the offices that they were in and they get contracts. and it seems to me that that is rapid and medicare, medicaid, department of defense and throughout the federal government that they hire federal employees who retire at
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a fairly young age on average, and then i go back and they get these contracts from the departments, or agencies that they worked for. and it's crooked. it ought to be against the law, and i hope that in future reports you will point to some things like that out, too, mr. dodaro. thank you very much, mr. chairman. >> i thank the gentleman. and mr. dodaro, thank you very much for taking time out of your busy schedule today. i'm sorry, i yield to the ranking member for a statement. >> i just want to just, as we close, again i want to thank you and your staff for your excellent report. i want to say to mr. duncan who just spoke -- isn't duncan? he just did what he said is so important. we talk about waste, fraud, abuse, and sometimes i think we can talk about it as if it's
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just a lightweight thing. but as mr. duncan pointed out this is serious stuff. and when we talk about trying to figure out how we save money and all that you know, i just want you coming you will do a great job. by want you to continue to try to show was how we can be more effective and efficient in rooting out some of this waste, fraud, and abuse. because it's real. i think we kind of just say it communism and a lot of times when i really digging deep to get to it. it may call us highlighting is very bad actors. it may call for us making sure that things get referred to the proper authorities, like justice or whatever, but we've got to get to this because, and we got the kind of money that he was just talking a, just going out the door. and some folks getting rich.
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but at the same time the money not going to the very folks we intended to go to. it just seems like, you know, maybe we need to zero in on okay now, how do we go from research to truly be effective and efficient in making that research, you know, bear some fruit. there's nothing i hate more than research that gets placed on a shelf, only to be dusted off and put in the microwave five years later or 10 years later and reissued. and the problem just keeps going on and on and on. and so i just hope that, you know, i know your staff is very focused. i know they want to make sure they do the right thing. again, i just want you all to do everything to help us to even more effective and efficient even though it are. >> would the gentleman yield? >> of course. >> i just want to associate my
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remarks with those of yours and those of mr. duncan's. you know, there were very few members here today. this should be a mandatory meeting for every member of this committee. because of this particular report of high risk problems ind the u.s. government should be something that every member of this committee that's the money with, and it should be the roadmap for much of the work we do in our subcommittee. and i know you are serious about making some inroads in terms of getting rid of the fraud and abuse. i know that the general i is and all the staff that works within. we've got to work together to resolve this. because otherwise it's just all cheap talk ideal. >> i must say, as i just take 30 more seconds, to chairman issa this morning in a press conference, he recommitted to making sure that we do those things that we are talking about so we could be more effective
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and efficient. and that's what i was using to you, mr. dodaro, if there are things you can help us with so that we can -- i know you and your recommendations or whatever, but again, you know, some of the things i worry about is that when i look back on my tenure as a congressman, i don't want to look back with regret. that i failed to do the things that i could have done to help my constituents. and so sometimes maybe we need help. maybe we need tools. maybe we need advice. and if you, your staff, maybe we need a new era of how to really take these reports and bring light to them. because you know, those wonderful people, great government servant sitting behind you, many of them, probably all them could be making more money doing other things, but they come to government service to feed their souls, to feed their souls.
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and they come to make a difference. and i want them in feeding their souls to be effective, too. i don't want them to say well you know, we gave our report and take a place on the shelf, and you know, it never went anywhere. and so at some time, at some point been their morale goes down. i mean, it's just logical. so if you want to take you. but you about to say something. thank you very much spent i would just like to make a couple points, in regard your comments, mr. cummings, number one is a high-risk program will remain the top priority for gao as long as i'm comptroller general. my term goes to 2025. i made a commitment in my confirmation hearing that this would be a high priority. it will remain so. second point, i would say one of the things that could be done that this committee could talk about is a sunny summer the high-risk areas, either
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subcommittee for individual members on the committee so they can become well versed and deepen these issues and we could work with them. that's been done in the past, and there was a high risk caucus at one point in the congress, when we first of the program. and has some good effect. and they could work, put more pressure on the agencies or understand issues deeper. so i would say do that. third point, my last point is that you can do something selfless. we are at our lowest staffing level since 1935. obviously, it's in a much different position now than it was in 1935. we return $105 or every 1 dollar spent on geo this has to. we had more than $55 billion in documented financial benefits as resulasa result of implementingr recommendations. over the last decade that comes to about a half a trillion dollars. so we think we're good
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investment, but we need to know. so we appreciate whatever this committee could do. so thank you very much. it's been approach to be here today, and you have our commitment that myself and all the dedicated and talented people at the gao are at your disposal to make headway in making government or efficient and effective for the benefit of the american people. >> i thank you for that. i thank the ranking member, and certainly thank ms. spears for her, in the spirit of summer's decision all as all those folks are watching this thing today, i agree this is an encoded important issue as we look at our out of control debt, deficit and spending problems. we hear calls revenue increases and for american people watching this hearing and listening to the high-risk list and how long things than on the high-risk list i think to be are discouraged if not disgusted that we're not doing better. i think it would be a shame as the american people for another dime of revenue and to we start to solve these problems. so in that spirit i'm looking forward to working with my
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colleagues in addressing these important issues. so again, i will thank you for taking time out of your busy schedule as well as your staff to appear before us today. and the committee stands adjourned. >> [inaudible conversations] >> [inaudible conversations]
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>> [inaudible conversations] >> it's been 10 years since the creation of the department of homeland security. this morning a house home and saturday subcommittee holds an oversight are looking at the agency spending. this comes after government accountability report on government agencies vulnerable to fraud, waste and mismanagement. live coverage at 9 a.m. eastern
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here on c-span2. >> domestic drone use is the focus of the house science space and technology subcommittee hearing friday morning. members will examine the challenges facing operations in u.s. airspace. officials from the faa and nasa are expected to testify. live coverage 10 a.m. eastern our companion network c-span3. >> i think the women themselves in many cases were interested in politics, but had no vehicle to express that in their own lives so they were attracted to men who were going to become politically active, or were already politically active. >> each of them i find intriguing, probably half of them in particular are out there precisely because they're so -- historically. i think half of these women probably would be almost totally unrecognizable to most men

Today in Washington
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